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PNG govt to take charge of OK Tedi funds

Staff Reporter 4/03/2013 | | |

PAPUA New Guinea will assume greater control of the philanthropic fund established by BHP Billiton to manage the profits of its former copper mine at Ok Tedi, the PNG government pledged yesterday.

In Port Moresby's Post Courier, Prime Minister Peter O'Neill said the $1.3 billion PNG Sustainable Development Program would be restructured to obliterate "secret arrangements" that had allowed BHP to quietly "keep control" of the mine.

BHP transferred its 52 per cent ownership of the Ok Tedi mine into the Singapore-based PNGSDP in 2002 after a string of pollution scandals. BHP had sought to shut down the mine, but the government refused.

Mr O'Neill wrote: "When the lease expires (at the end of this year), the national government will put in place management arrangements that end any secret arrangements, and ensure that the people of PNG, including the . . . landowners, have a say in the mine's future and management."We will ensure the PNGSDP is managed in PNG, and its funds are held in PNG, and used transparently for the good of the people of the Fly River Province, and the nation generally."

Ok Tedi has an annual output of about $4.5bn, and contributed $519 million tax last year, making it PNG's largest single source of public revenue.

Mr O'Neill wrote that BHP only "pretended" to divest its share of the mine, retaining control "through myriad structures".

Economist Ross Garnaut resigned as PNGSDP chairman in November and was banned from PNG by Mr O'Neill for implying publicly that the government would misuse PNGSDP funds.

BHP announced in September it would no longer appoint board members to the PNGSDP. Future directors would be chosen by the board, which includes PNG government nominees.

PNG's government and the Western Province government jointly own a 36.6 per cent share of OK Tedi; the PNGSDP holds a 63.4 per cent stake.

A BHP spokeswoman said last night the company had "no direct role" in managing the Ok Tedi mine or the PNGSDP fund.

AAP

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